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AnaptysBio Gears Up For an Eventful Year

Investors can look forward to lots of clinical trial activity with two important candidates.

When you don't have a product to sell, advancing new drug candidates is a better sign of strength than headline earnings figures. This explains why AnaptysBio Inc.(NASDAQ:ANAB) announced fourth-quarter earnings on Monday, without a warning or a conference call.

Management highlighted a full slate of clinical-trial activity that will keep investors on the edge of their seats in the quarters ahead, but the headline figures were pretty standard for a clinical-stage biotech.

AnaptysBio Inc. results: The raw numbers

Metric

Q4 2017

Q4 2016

Year-Over-Year Change

Revenue

$3.0 million

$2.8 million

7%

Income from operations

($7.2 million)

($28.7 million)

N/A

Earnings per share

($0.30)

($1.52)

N/A

Data source: AnaptysBio.

What happened this quarter?

AnaptysBio received $3 million from Tesaro for initiating a phase 2 trial with TSR022, an anti-TIM-3 candidate.

A successful share offering added $292.5 million to AnaptysBio's cash balance. The company finished the quarter with cash, cash equivalents, and investments totaling $324.3 million.

The company's lead candidate, ANB020 succeeded in a phase 2a eczema trial. All 12 patients achieved clear skin on at least half of their body after 57 days of treatment.

A separate phase 2a peanut allergy trial with ANB020 completed enrollment. The 20-patient study will include a placebo control group.

Enrollment of patients with severe eosinophilic asthma into another phase 2a study with ANB020 continued. This 24-patient study will include a placebo group as well.

A potential first-in-class IL-36 candidate, ANB019 showed favorable data in a safety study with healthy volunteers. Management announced an upcoming phase 2a study of the drug as a treatment for rare but severe forms of psoriasis.

Image source: Getty Images.

What management had to say

President and CEO Hamza Suria limited his comments to reiterating plans for the company's wholly owned candidates this year:

We are poised to continue advancing our ANB020 and ANB019 programs with additional clinical data readouts in serious inflammatory conditions during 2018. We are on-track to report top-line data on ANB020 as a treatment for both severe adult peanut allergy in March 2018 and severe adult eosinophilic asthma during the second quarter of 2018. We plan to initiate a Phase 2b study of ANB020 in moderate-to-severe adult atopic dermatitis during the first half of 2018, as well as Phase 2 studies of ANB019 in generalized pustular psoriasis, or GPP and palmo-plantar pustular psoriasis, or PPP, during 2018. These milestones are significant for the company, and important steps forward in bringing our novel treatments to patients with severe inflammatory diseases.

Looking forward

Adult patients with moderate-to-severe eczema are still learning that their condition might be treatable with a drug that launched last year. Once the ball gets rolling, though, Dupixent -- from partners Sanofi(NYSE: SNY) and Regeneron (NASDAQ: REGN) -- is expected to generate more than $4 billion in peak annual sales.

We'll need to wait until 2019 to see if ANB020 can take on Dupixent in the important eczema category, but there could still be plenty to get excited about in 2018. Investors will want to compare upcoming peanut allergy data for ANB020 with a high bar recently set by AR101 from Aimmune Therapeutics(NASDAQ: AIMT). More than two-thirds of patients on AR101 tolerated 600mg or more of peanut protein, versus just 4% of those given a placebo. Results from ANB020's 20-patient placebo-controlled study are expected before the end of the month.

With between 200 and 300 patients expected to enroll in ANB020's phase 2b eczema trial, operating losses are going to swell. That said, there was enough cash on the balance sheet at the end of the year to keep operations humming along through the end of 2019.